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/biz/ - Business & Finance

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608366 No.608366 [Reply] [Original]

Is now the time to buy a house? Interest rates probably couldn't get any lower, right? I'm looking at 3.75% for a 30 year traditional mortgage if I jump in. Money will be tight the first couple of years but should get easier and will be nice to start building equity instead of paying everything to my insane landlord.

Making 60k, about to be bumped to 70k. Putting 40k down on a 310k house (3 bedrooms, 1 and a half baths, unfinished basement, big deck and backyard, 2 car garage) in NY. Taxes are insane, about 8k/year but possibly 7k with STAR. Looking at about $2100/month total payment including insurance, but not including utilities. Paying $1300/month right now for a shitty 1 bedroom apartment.

I'm 31, wife is 33 and not working right now but will start soon and will only be making part-time low wage shit. But it'll definitely help with expenses.

Should I do it?

>> No.608367

>>608366
Yes, you are 31. You should own a house by this age. What else is your wife going to get in the eventual divorce?

>> No.608370

>>608367

Yeah but in NY most 31 year olds are still living at home or in Brooklyn in a shitty shared apartment. Times have changed my friend.

>> No.608384

Fuck no.
Fuck what you 'should do'
Fuck whatever age you are.
Get a new rental for less, save for a little.
BUY THAT SHIT

>> No.608390

>>608366
Brother I do mortgages for a living. What are you actually trying to get an answer about?

>> No.608397

>>608366

>Makes $60k a year, assuming this gross
>$310k McMansion
>Literally half of your annual gross pay goes to this house

Do it OP, what's the worst that could happen

>> No.608402

>>608397
310k is probably out of his price range but as long as he doesn't have a fuck ton of debt and his DTI is below 43% it's a feasible option. Owning a home is a lot better than renting. I've done loans with DTI up to 51% by using FHA. If OP hasn't abandoned his thread I would be able to advise him better.

>> No.608406

>>608397
>$310k
>McMansion

Are you insane? Sounds like a normal house to me, a McMansion would be a lot more than $310k.

>> No.608409

>>608406
Technically anything over county loan limits is considered a "mcmansion" because it's classified as jumbo. Most counties limits are 417k.

>> No.608423

>>608402

He will be completely house poor if he does this and just one little fuck up and he's getting foreclosed on and declaring bankruptcy.

>>608406

$310k for a 3 bedroom 1 bath is the epitome of a McMansion.

It's a low quality house in an overbuilt neighborhood that would be half of that anywhere else.

>> No.608427

>>608423
I'm glad you have extensive knowledge on other peoples finances regarding mortgages. I sure wish I had some kind of experience doing that 9-5 on a daily basis.

And that's one hell of an assumption considering you don't know the neighborhood or surrounding area.

Way to make yourself look like a presumptuous asshole, guy.

>> No.608428

>>608427

So instead of actually refuting the fact that he will be house poor because this house will take up ~50% of his gross pay, you just ignore it and resort to a shitty appeal to authority and condescending tone.

I really hope you're another fucking neet role playing, because you're fucking retarded otherwise and putting a lot of people at risk.

Help the goy by shackling him to this shitty house.

>> No.608436

>>608428
Okay faggot. I do this for a living let's get down to it.

60k annually

60k/52 = 1153.84/week gross
1153.84*4=4615.38/Monthly

310K Purchase Price
270K Loan Amount

30 Year Fixed at 3.75%

Principle and Interest Payment: 1250.41/Month
Taxes: 625/Month
Homeowners:270/Month(estimated)

Total Monthly Payment: 2145.41$

2145.41/4615.38=45.4% DTI

Assuming OP has a few bullshit credit cards and a card payment he's at 50% DTI - which would qualify for an FHA loan as long as he has other compensating factors.

He may have to look for a lower purchase price but with rates where they're at, right now is the time to buy.

Fuck off pleb.

>> No.608440

>>608436

Congrats retard, you just spent all this time and energy just to agree with what I said the very time you quoted me

You are amazing at your job. It's almost like it takes zero training or education to come to simple conclusions like that.

>> No.608445

>>608440
Yea...you're right. Being federally licensed as a loan originator takes no effort or education. When you get a chance, google what it takes to do my job.

At least you're not alone at the bottom of the social hierarchy of success. I'm guessing you still live with your parents or collect welfare. Good game, mate.

>> No.608450

>>608445

I'm a contractor and I made ~$130k net last year. This is how I know shit housing deals when I see them.

I get that your job it to get the loan and that you're saying it can be done, but my original point is that it puts OP on a razor thin budget and if he already has existing debt and car payments, then he's going to just continually fall into more and more debt.

Like you said, his DTI is ~50%. Getting this house turns him into a a complete wage slave who will spend the next 30 years of his life stressing out because if he goes out to eat once a week instead of rice and beans, then he adds more debt.

All of this just so OP can have a shitty 3 bedroom 1 bath house that is over valued and will pop at the next crash, that he will have to sell at some point anyway when he and his wife decide to have children. The only way this house could not be an overvalued piece of trash is that it's right in the middle of the downtown area of his city.

I get that you're telling him that he can do it, but why would anyone willingly choose to be a wage slave for a house with one bathroom?

>> No.608454

>>608450
Okay I get that. There's a lot of variables, we don't know what debt he does have so you might be right there. But I used to be licensed in NY and the housing pricing are stupid even for smaller houses... I don't know where you contract out of but the housing market is probably extremely different. (Unless you're in Cali or certain parts of FL)

With his raise coming up along with his wife making a little side income I think they would be fine... But from a realistic standpoint I would have to side with you and OP would need to make sure it wouldn't financially ruin him.

Good conversation sir. It's little gems like this that make me come to /biz/.

>> No.608455

>>608445
Mortgage guy, are you still available for advice?

The average cost of a house in my city is $432,000. I'd want an above-average quality house, but assume my purchasing point is at this average price of $432,000. If average property taxes are $2,847/year, and average mortgage payments hover around $2,000/month, what would be a good income to purchase at?

>> No.608456

>>608454

And I do apologize for insulting you.

4chan NEETs role playing billionaires have made me very bitter and dismissive that I forget that there are other professionals on this board who are not using Google to refute every opposing post.

Have a great night bro

>> No.608461

>>608456
Likewise my friend.

>>608455

That's a loaded question, m8. Let me ask you this.

Assuming purchase price of 432,000 and your county loan limit is 417,000 that would make your loan a jumbo. What kind of down payment are you planning on putting down?

Because 2000/month for a 432000$ home doesn't seem feasible at face value unless you're putting at least 20% down to avoid PMI.

>> No.608462

>>608461
I'm reporting numbers based on my local market, which is based in Canada. I'm not expecting to purchase soon, and understand that the market can change, but I'm trying to get ballpark figures where I can.

I'd prefer to put as large a down-payment as possible, and have heard of 10-20% being relatively common earlier on in this decade. Realistically, however, my present comfort would probably max out at a 10% down payment.

>> No.608465

OP here. No debt, no car payments, no credit card payments. All good on that front. And by the way, my company is a family company. It's a small company so I can't just sit on my ass, but it's not like I'll get fired for some stupid shit unless the whole place goes under. And even if that happens, I'm professionally licensed and can find a new job (with a longer commute) fairly easily.

>> No.608466

>>608461
Different anon here, but where I live the average price is 400k and jumbo starts at 520k.

>> No.608471

>>608461
Hey, can I ask you a question about rates? How does the bank figure out who would make a reliable borrower and worthy of a low interest rate?

I ask because I recently moved to the US from Canada so I have barely any credit history. But I have a pretty decent salary (110k + bonus + stock grants).

I offered to make a 100k down payment on a 400k home and they all but laughed me out of the bank for having no credit history. But isn't 25% a pretty good down payment? They'd only have to give me a 300k loan on a 400k house. Shouldn't that cover them in the event of a default?

I don't now have nor do I ever plan to have any loans (with the sole exception of a mortgage). Does that mean they'll always tell me I can't get a good rate, or a loan at all, because I have no loan history?

How much down will I have to put before they give me a good rate? I can probably swing 150k pretty easily, 200-250k if I cash out my Canadian assets. What's it going to take? Any advice? Thanks.

>> No.608482

>>608465
I would need to pull your credit and price you out to give you an accurate analysis. What I said before is using just the information I had available.

>>608466
As stated above county loan limits can be different depending on the county because they are set by the county. Some areas don't start being jumbo until 625k. You live somewhere in CA or AK or FL?

>>608471
There is so much that goes into qualifying for a loan I can see why the banks laughed at you. It's nothing personal though, the guidelines are so fucking strict that it's hard to qualify for a mortgage nowadays. I'll tell you one thing though, without a few tradelines and your credit being built you will never get a mortgage.

My advice is to get a 2 year work history, get 2 credit cards and a car loan so you can build your credit quickly and then apply. You've already got the down payment taken care of, which for most people is the hardest part.

>> No.608490

>>608482
I figure I might ask as well.

I am a 22 year old who is working 2 jobs and I am approaching two years at both of my employers. I have two credit cards which I am in the process of paying off and after this tax season I should have enough money to attempt to get a duplex if I trend towards more conventional financing.

However, I am also aware I may qualify for a USDA loan for a house located in a more rural area if I was to apply and be approved for it.

I have roughly $4000 in Company Employee Stock Purchase equities I am almost ready to cash out, $3000-4000 in savings bonds I have saved. Roughly $1700 in a company 401k that I could use to acquire financing and roughly $3000 in firearms that could be liquidated if need be. In addition I have some various precious metals amounting to around $800 stashed away.

I am anticipating roughly $7000-8000 in this tax season due to my provision of support to a younger sibling leading to my ability to claim EITC and Child Tax Credit in addition to my late filing for a refund for 2012.

My question to you, should I be searching for a conventionally financed property or should I be looking towards the USDA program. I am also aware that I may be able to edgewise work towards both.

I should also state that my income for 2014 was roughly $34000 and this year should pretty closely match what I earned in the previous year.

>> No.608500

>>608490
Let me explain it like this. There are 4 factors in qualifying for a mortgage

Credit
Assets
Property
Income

If your credit is at least 620 you hit the cut off for a conventional loan but the rate may be a little shitty.

Assets: In your case you have what we would consider "mattress money" ideally we would like to see your money seasoned in a bank account for at least 2 months in liquid funds (checking, savings, 401k). The stock may be able to be used for reserve purposes but it's really case by case and I would have to check the guidelines to see whether or not we could include that in qualifying assets. The savings bonds can be used and the firearms as well as the metals would need to be sold and seasoned in a bank account for 2 months as stated above.

The tax return money would also need to be seasoned because it's not a consistent source of income or assets. Before closing a client is told exactly where the money is coming from and which account.

USDA is 100% financing and no PMI. It's the second best loan, VA being the first. You can look up your property to see if it's USDA eligible using this site: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

There is so much that goes into mortgages I can only give you general specifics without knowing your full situation. I will give general advice because I like /biz/ but I'm not going to break down your full scenario because I'm not getting paid to do so. It's no hard feelings.

My advice: try for USDA because of the 100% financing and no PMI or go straight conventional because you only need to put 3% down. (Fannie and Freddie just changed their down payment requirements from 5 to 3% recently for first time home buyers)

Hope this helped and I'm still open to answer questions. I think I may tripcode because I'm starting to give advice more frequently on this board lol.

>> No.608625

>>608366
>property taxes are 8k
How much have taxes went up since 2004? On the house n property?
Do you plan on retiring here?
Keep that in mind. I know in jersey some retirees can't afford their taxes cause their so expensive